Glencairn revs its drills

Glencairn Gold (GGG-T) has tabled plans for a US$5-million 55,000-metre drill program aimed at significantly boosting its proven and probable gold reserves at its three main projects.

The bulk of the metres (about 40,000 metres) will be sunk in the vicinity of the Limon gold mine in Nicaragua. Glencairn says that reserves at the 1,000-tonne-per-day mine are currently sufficient for about two more years, or about 120,000 oz., of production.

Part of the drilling is designed to convert resources into reserve. The program will also test at least twelve targets at the La India property 45 km to the east and at several other nearby properties. Between 1938-1957, La India produced some 400,000 oz. of gold.

During 2003, El Limon produced 46,000 oz. of gold, around 9% short of expectations. The shortfall is attributed to problems with equipment availability during the summer and fall. Those problems have also forced the company to trim its production forecast for 2004 to 53,000 oz. at an estimated cash operating cost of US$228 per ounce. Development delays mean that some higher-grade zones, which were to be accessed during the fourth quarter of this year won’t reach production until early 2005. The company plans to sink some US$2.4 million into new mining equipment and an accelerated development program.

At the Bellavista mine in Costa Rica, Glencairn plans 3,000 metres worth of drilling to test several targets on the 90-sq.-km property. The holes will also target the strike extension of the nearby Montezuma mine, which poured around 100,000 oz. of gold between 1897-1916. Drilling by a previous operator in the area in the 1990s cut up to 12 grams gold over 8 metres.

The initial stage of construction of the US$26 million Bellavista mine is on target, and start-up is anticipated in the fourth quarter of 2004. Glencairn is in advanced talks with banks and financial institutions to arrange an additional US$20 million required to complete the project.

At full steam Bellavista is expected to churn out 60,000 oz. of gold per year at an operating cash costs of about US$163 per oz. over 7.3 years. Total costs, including all royalties, are pegged at US$177 per oz. Reserves total 11.2 million tonnes grading 1.54 grams gold per tonne.

Another 12,000 metres of drilling is planned to upgrade resources at the Vogel property in Timmins. The property is home to an indicated resource of 642,000 tonnes running 12.7 grams gold, or 261,000 contained ounces. An additional 933,000 tonnes of inferred resources grade 12.7 grams gold, or 379,000 contained ounces. Underground development would follow later this month, based n positive drill results. Ultimately, Glencairn says production could begin as early as 2005. Ore would be sent to one of several operating mills in the area.